Think life insurance is just a single-use tool in your kit of financial essentials? Think again. A life insurance policy could actually be the MacGyver of your financial life. Life insurance products may help back up your business, assist with paying for college, help cover nursing home costs, and more. Here’s how.
- Boost protection for your business: Business owners can name their business partners — or the company itself — as their life insurance beneficiaries. The policy’s cash death benefit could help your business partner buy your share of the company or help keep your business going strong while your heirs decide next steps.
- Supplement college savings: Running short on financial assets when your teen gets accepted to college? You may be able to take out a loan against your permanent life policy. Grandparents can also name grandkids as life insurance product beneficiaries. In addition to making cash gifts toward college tuition while they’re alive, grandparents’ insurance proceeds may help fulfill their dreams of sending the next generation to college.
- Protect relatives who depend on you: Are you single with elderly parents — or another relative with special needs — who rely on you for financial help? You can name those relatives as insurance beneficiaries.
- Boost long-term care options: You may be able to add an option to your life insurance that lets you put some of your policy’s death benefit to work in advance. You can use the fund to pay for your own nursing home, in-home, or other type of long-term care expenses.
- Divide your assets as necessary: Your heirs may not be able to evenly split all your assets — such as the beloved family vacation house or a business — when you die. If one family member inherits the house, for instance, you could leave life insurance of equal cash value to other relatives to keep things fair.